How much do I need in my bank to start an online private practice?

In 2013 I signed the lease for my first ever office space. It was mortifying. It was for my solo private practice. It had a waiting area, two consulting rooms, and a little kitchenette. I was incredibly nervous – I was literally starting the business with a business plan, a bunch of motivation, and a few dollars in the bank.

In this post, I’m going to tell you how much money you need to start an online private practice, where you see people via video only. For some of you, this will be in addition to your in-person private practice, for others your online practice will be standalone – it will be your whole gig.

I went back to check out that office five times (yes, f-i-v-e) before I was ready to make the decision to go all-in and sign the lease. Guess how much money was on the table? My rent was going to be $12,000 for the year. At the time, that felt huge. And, I was so worried about money that I also played DIY lawyer and negotiated my lease terms and clauses. One way I talked myself into committing, was by calculating how many sessions I’d need to have to pay out the lease. 80 sessions, to be exact. Can do!

A year after that, I’d grown the business from 1 person (me) to a group private practice. We outgrew the space and I upgraded to a more beautiful and much larger office and the worry about $12K seemed like a distant, fond, memory.

Most people have no idea how many dollars they need upfront to start a practice

They don’t think much about marketing, advertising, getting a virtual assistant (in the first instance), insurance, all the software, plus all of the things that create a special experience, and make people want to come back and see you. I know I underestimated costs back then, in a gigantic way. It wasn’t until the second year in business that I was personally earning a decent income.

If you don’t know how much you need to invest in your business, you can’t plan well. And if you can’t plan well, scarcity-based thinking and not-so-awesome decision making can creep in. And before you know it, you’re accepting clients via poorly-paying programs. The following is why I chose not to do this.

In my group private practice, I knew that each consulting room needed to bring in $100 an hour to pay all of the bills – staff, rent, and marketing for example. This meant that typically we couldn’t see clients for less than $100 per 50-minute session. Or we’d be losing money. Because of this, I was also seriously motivated to reduce cancellations and get no show rates down to almost zero. As a result, our systems and procedures were awesome and our reception team was top notch. I couldn’t afford for it to be any other way.

If you’re currently seeing people for a meager amount, I encourage you to do the math. How much do you need to charge just to pay your bills (including a modest wage for yourself), before making any profit?

In addition, owning a business is a glitchy experience, particularly when they’re new. You’re not yet running a tight ship. Because of this, you need the mental space to be able to work through those glitches and develop and test solutions.

For example, decreasing no show rates or cancellations requires effort – the development of policies and the training of staff (including you). Then those systems need to be refined. And if you’re unable to find this mental space, because you’re working a 50-hour week seeing a bunch of low paying clients your business will be going nowhere real fast. I always thought to do this was counter-intuitive. People are so worried about putting food on the table and paying their bills that they resort to behavior that keeps them on that hamster wheel. But I absolutely see how people end up here. That’s one of the reasons I do what I do now.

If you reach the hamster wheel realization moment there are two choices – go and work for someone else and let all this stuff be their problem, or start making better business decisions, one at a time so you get off that thing and find a nice stable surface from which you can start building the life you want.

Anything worth doing requires discipline and perseverance. This holds true with both in-person and online private practices. But I get it – you can only find discipline and persevere if you know that actions your taking, are in fact correct.

Let’s delve into the online side of things. What are the essential activities that need to take place? And how much are you up for?

First of all, let me start by mentioning, that you cannot put together a website and then sit back and watch the bookings roll on in. Nope! The only way bookings worth getting happen, is with your own consistent effort and by following a plan that works:

Here’s a breakdown of the costs that will be applicable for your online practice immediately:

Initial website setup – $350 for a DIY site, like Wix or Squarespace + your time developing content, designing your site, and setting up payment methods | $3000-$6000 to work with a developer and designer for a WordPress site.

Continuous website costs – $400/year for a DIY Wix site | $700/year for a more robust site (think plugins)

Email management software – Autopilot, ActiveCampaign (about $500 a year, although there are cheaper options for those just getting started) and,

Professionally designed logo ($400). You can wait a while to get this if needed. You can whip up a temporary logo in Canva while you’re getting established.

And then there are the business as usual expenses, like insurance. I had ‘online services’ added to my existing insurance, and it cost me nothing extra. You’ve also got to consider rent and what expenses are tax-deductible if you’re working from a home office – like a portion of your internet costs, electricity, etc. You will want to factor these costs into your session rates.

Sub-total: $3410 minimum to about $8760.

Now, for some of you, you’ll already have all of these things up and running. If you’re in the business of growing any business, you need the above.

Let’s delve into other costs that are more specifically associated with online practice. And the associated activities that really make an online private practice work, meaning that:

a) you get clientsb) you get clients you actually want to work withc) you get private pay clients (because seeing clients for 50 hours a week doesn’t sound like freedom to me)d) you get automated systems set up so that people don’t need any contact with you to make a booking

SEO (search engine optimization)

I know SEO makes most of you go ‘huh’? But it really is a great long-term strategy and one worth investing in.

You’ve got a website, but that doesn’t mean people can find you in the sea of websites (there are 1.5 billion of them). So you need a strategy to rank for very specific keywords that are highly relevant to your niche audience. This means that they’ll be able to find you online, and they’ll travel to your website.

I recommend you DIY SEO and when you have your head around what you’re doing, you can choose to outsource it. The problem is, there are so many cowboys in the SEO game, if you don’t have a decent degree of knowledge about SEO processes, you’ll be taken for a ride. We teach SEO in our big course, which is open for enrolment in August. There’s nothing stopping you from reading up on it now. Search Engine Journal and Moz are solid free resources and you’ll get caught up on the lingo that matters.

Cost = your time, approximately 2 hours per week + SEO software like Ahrefs, SemRush occasionally ($100/mo) for keyword research. Once you know what keywords you’re targeting you can ditch the software and turn it back on as needed.

Email list building

Email list building can be slow or fast. You can speed up your email list building dramatically by using Facebook Ads. This, of course, comes at a cost. Think about $4-$8 per email address if your ads are optimized. Or instead or ideally in addition to ads, you can choose to be very active on your social media channels, and occasionally post about your new blog, or drive people to an amazing, free downloadable on your website, in exchange for their email address.

Email list building needs to be a core strategy for your online practice. There’s no better confidence-inducing feeling than sending off an email to 2000 people, knowing you’ll make sales immediately.

Cost = Your time, up to $25/day for Facebook ads that result in you getting about 5 new email addresses each day from potential new clients.

A virtual assistant

Because you have an online business, you can be flexible about where your virtual assistant lives. They don’t have to be in the same suburb as you. They can be on the other side of the country. A VA is worth it when you’re getting busy and not able to keep your eye on everything.

Cost = $15-$40 per hour depending on their level of expertise.

Social media

Get great at delivering content on your chosen social platform, so you resonate with your ideal audience. You want them to remember you so that when they need your services, you’re the first person they think of. Video wins almost every time on socials. But the key is engagement – you want your audience to like, comment, and share your stuff. If they’re not doing this, this is a sign that you’re not putting out the right content, or your offer isn’t appealing to your audience.

Cost = your time, about 2 hours per week.

There you have it, these are the essentials to growing an online practice successfully. And these strategies only take four hours per week. The thought “I don’t have time” is worth revisiting.

The key to these strategies is to remain consistent. You’d never want to stop doing activities that drive the right clients to you.

Tell me in the comments below, what else you think is essential to your online private practice?

If you’d like support in learning how to do all of the online private practice activities that result in getting the right clients and more freedom, you’re invited to join my 10-day video training. Right now it’s free, so why not?

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